Companies Face Hurdles in Addressing Climate Risks

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"Climate change is already imposing real costs on companies and communities, and they’ll need to work together to increase resilience." __ C2ES President Bob Perciasepe

WASHINGTON (PRWEB)September 22, 2015

A growing number of major global companies are assessing the risks posed by climate change, but many still struggle to translate climate data into actions to improve resilience, according to a new report by the Center for Climate and Energy Solutions (C2ES).

Most major companies – 91 percent of the Standard and Poor’s Global 100 Index – recognize climate risks to their business. A growing number – at least 39 percent – are conducting vulnerability assessments, and many (30 percent) use climate-specific models, according to the report.

But there’s no one-size-fits-all method to assess climate risks, and companies struggle to connect the dots between global data projecting long-term impacts and location-specific, short-term business decisions.

“Governments and companies must take action to reduce the emissions contributing to climate change,” said C2ES President Bob Perciasepe. “But climate change is already imposing real costs on companies and communities, and they’ll need to work together to increase resilience.”

The report synthesizes findings from public disclosures by S&P Global 100 companies, in-depth interviews with more than 50 companies, and workshops with business leaders, government officials, academics and other stakeholders. It expands on a 2013 C2ES report that provided a baseline for how companies were assessing their climate vulnerabilities. Funding for the multi-year C2ES research initiative on business resilience is provided by Bank of America.

The report was released at a Climate Week NYC event featuring Amy Luers, assistant director of climate resilience and information at the White House Office of Science and Technology Policy; Alex Liftman, Bank of America’s global environmental executive; Roberta Barbieri, global environmental director for Diageo; Jay Bruns, vice president of public policy at The Hartford; and Melissa Lavinson, corporate sustainability officer for PG&E.

Key Findings

Most major companies recognize and report climate risks.

Ninety-one of the 100 companies in the S&P Global 100 Index see extreme weather and climate change impacts as current or future risks to their business. Most of the companies (84) discuss climate risk concerns in CDP questionnaires. Fewer companies do so in their sustainability reports (47) or financial filings (40), but reporting has increased slightly since 2013.

Companies worry about climate impacts beyond their facilities.

Almost all companies interviewed expressed concern about impacts to their supply chains. As one company noted, “You are only as resilient as your weakest link, so it is important to identify where that link is.” They also worry about public roads and other infrastructure, and access to electricity and water.

There isn’t one right way to assess and manage climate risks.

Many companies view climate change as a “threat multiplier” that exacerbates existing risks. This puts climate change into a familiar context, but could cause companies to overlook or underestimate threats. Some companies examine risks across their enterprise, while others focus on specific facilities, regions, or threats – such as climate impacts on water supply, which was a key concern.

Companies, state and city governments, non-profits and local experts should explore partnerships to analyze data, evaluate climate risks, do cost-benefit studies, and implement resilience planning.

Not all companies report climate risk and the degree of detail varies significantly among those that do. Governments should look for ways to streamline climate risk reporting and provide more guidance on how to incorporate climate risks into financial disclosures.

Governments should improve public infrastructure and provide opportunities for the private sector to contribute to resilience planning efforts and investments.

About C2ES
The Center for Climate and Energy Solutions (C2ES) is an independent, nonprofit, nonpartisan organization promoting strong policy and action to address our climate and energy challenges. Learn more at http://www.c2es.org.